Illinois Real Estate Closing Guide



What can you expect when closing a real estate deal in Illinois? Keep reading for answers to the 10 most common questions Illinois buyers and sellers have.

#1. As a buyer, do I need to do anything before the actual closing day?

Yes, if your sales contract permits it, you should conduct a walk-through inspection of your future home the day before you close to make sure the property is vacant and in the condition agreed upon in the sales contract. If you discover major issues during your inspection, you can ask to delay the closing so the issues can be addressed. If a closing delay is not convenient or possible, you can ask the seller to deposit funds in escrow to cover the cost of the repairs.

Another important step before closing is to collect all the documentation you have received regarding the sale, including:

  • Home appraisal
  • Inspection reports
  • Proof of insurance (homeowners and mortgage, if applicable)
  • Closing Disclosures
  • Real estate contract
  • Loan estimate
  • Proof of title search/title insurance binder

These documents will come in handy if you need to refer to them at some point during the closing meeting.

Your real estate lawyer will want to review the title insurance binder before closing to make sure you will receive clear title to the property. You may need to work with your lawyer to resolve problems like unpaid judgments that might hinder your purchase or affect your financing.

#2. As a seller, what do I need to do prior to closing day?

Maintaining your home in the condition agreed upon in the sales contract is one of the most important jobs the seller has prior to closing. If you agreed to make repairs, schedule those in enough time so they are finished before the sellers complete their final walk-through.

If you are currently living on the property, you should also schedule your move and disconnection of all utilities. Remember, until ownership officially transfers, the property is still your responsibility so do not cancel your homeowner’s insurance policy until the new owner is on record.

If you have a home loan, notify your lender of the closing date so that you can get an exact payoff figure. Your closing agent might also do that, but you should double check.

It is helpful to collect all the warranty and instruction books for the appliances and HVAC systems installed in your home. You can leave these in your home in a place where the buyer can easily access them or bring them with you to the closing meeting. You should also remember to bring your keys to the home, as well as garage door openers and any alarm codes the new owners will need.

#3. What happens during the actual closing meeting?

On the day of closing, buyers will be asked to participate in two important ways:

Sign here, here and here: You may need to sign documents related to two different types of agreements–the agreement between buyer and seller as well as the agreement between borrower and mortgage lender. Both the sale and the financing of the sale require a number of disclosures that you will need to read and sign. You will need to review and sign the closing statement, showing all charges connected with the sale. An experienced real estate attorney can help you review all the documents carefully to ensure everything is in order.

Pay closing costs and escrow: If you are financing the purchase of your home, you will have more fees associated with the loan at the time of closing. Some of the fees that buyers or sellers might pay include:

  • Bank processing fee
  • Credit report fee
  • Appraisal fee
  • Origination fee
  • Title insurance
  • Pre-paid interest
  • Pre-paid insurance
  • Flood certification fee
  • Tax servicing fee
  • Recording fee
  • Notary fee

Other expenses you may be expected to pay at closing include:

  • First month’s mortgage payment
  • Prorated property tax
  • Homeowners association dues

Your real estate attorney can help you review each of these costs line by line so you understand what you are paying for. You can usually opt to pay these expenses out-of-pocket or roll them into your mortgage loan. If you are paying out-of-pocket, you will need to determine the amount of that payment in advance of the closing.

As a seller, your list of closing costs is a lot shorter. You should come prepared to pay the real estate commission and the balance of any property taxes you owe. If those fees are deducted from the sale proceeds, payment will be made from funds held in escrow.

#4. What is the HUD-1?

All of the costs associated with the real estate transaction are itemized on the HUD-1 form. Your mortgage lender must approve this document prior to closing. You can obtain a copy of the HUD-1 from your realtor two to three days before you close. If you are not using a realtor, your real estate attorney will provide this document for you to review.

#5. How does a cash closing differ from a loan closing?

If you are purchasing a home with cash, you get to take immediate possession of the home and the seller walks away with the sale proceeds. If you purchase the home through the help of a lender, it could take between a few hours and several days before the loan is funded and you are able to take possession of the home. Be sure to ask your lender about the occupancy date before the closing so that you will be prepared.

#6. About how long does the closing meeting last?

On average, a real estate closing involving a lender will take one hour. For cash transactions, the closing meeting is much quicker, usually lasting 30 minutes.

#7. What are my options if I can’t attend the closing meeting?

If you have a military deployment or last-minute emergency that will prevent you from physically attending the closing, other arrangements can be made to keep the closing on schedule. Talk to your real estate attorney about preparing a power of attorney so that someone you choose can sign documents on your behalf. It may also be possible to sign documents in advance and to have them mailed or emailed to you, although it is good to be available by telephone in case your lawyer needs to speak with you about problems that arise during the closing.

#8. What form of payment is accepted for closing costs?

You will need to bring one certified check for all closing costs with you to the closing. The title company, real estate attorney, and real estate agent will all be paid from those certified funds.

#9. After the closing, what happens?

In a cash transaction, the buyer takes immediate possession and the sellers walk away with any proceeds minus their share of closing costs and any loan balance they owe that is secured by the property. For loan transactions, the transfer of ownership may be delayed until the lender funds the sale. Once the sale is finalized, the appropriate documents are filed with the country clerk and the transaction is complete.

#10. What is the deed of trust?

A deed of trust is an alternative to a traditional mortgage transaction. A deed of trust transfers the legal title of a property to a third-party trustee who holds the title as a security until the buyer pays the full balance of the home loan. Transactions involving a deed of trust involve different foreclosure rules than mortgage loans if the buyer defaults on the loan. You should talk to your real estate attorney to make sure you understand the difference between a mortgage loan and a deed of trust if you plan to finance your property purchase.